We're retired, married, and have $600K CD deposits earning 2.5% pa and a 6 month old $280K 5.875% 30 yr fixed mortgage balance. For years 2010 and up our mortgage interest is no longer a tax shelter for our total income which consists of CD interest and $3000/mo fixed pension. We see a 5 years horizon of poor economy with very low CD interest rates....and have no plans of keeping our house for more than 5 years.

Should we pay off our mortgage or not? Give us your opinion please.

Roberto

Hi Roberto, and welcome to the forum!!

The conventional advice is to keep a mortgage, but I can see by your conditions that you're quite right in questioning the conventional advice. Although one of the conditions has me puzzled; perhaps there's something in the tax code regarding retirement income I haven't run into yet: why the presumption that the mortgage interest will no longer be tax-deductible starting in 2010? Or did you mean something different? I see your income as about $51K total gross, or is that $51K over and above Social Security?

I'm going to move this to a more appropriate forum, and I apologize for not rewording the description on "Money Matters" yet.